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Way back when—even before I was born—the only glue available to the hammermaker (or anyone else, for that) was animal hide glue. This glue is made from the protein constituents of animal hides, hooves, bone, etc. When used to glue felt to wood moldings the solvent—water—tends to leech out of the glue into the felt creating what is known as a “starved” glue joint. A starved glue joint is a weak glue joint and the felt often came loose. Especially in humid climates.

The original intent of the reinforcing was to at least partially prevent—or slow—the rapid absorption of water into the felt, keeping it in the glue longer and allowing the glue to dry and cure properly.

Some companies added various chemicals and compounds to actually stiffen the shoulders of the hammers—hence the name “reinforcing”—so the material served a dual purpose. The idea was to stiffen up the shoulder without appreciably altering the character of the felt around the striking area. The color was added simply as a marketing distinction.

(Keep in mind that all hammers prior to the development of heat-setting adhesives in roughly the mid-1920s were cold-pressed. Some of them were pressed rather soft and this was a good way to brighten them up. The idea, and practice, of chemically hardening the striking area of the hammers—except in the highest half-octave or so—did not come along until fairly recently.)

Perhaps that could be so. But the hammers sound kind of soft, unlike a lot of baldwins.

Actually like most Baldwins prior to the 1960s and 1970s. With the introduction to the North American market of the hard and bright so-called "Asian" sound Baldwins, like most other pianos also started to get harder and brighter.